LOUISVILLE, KY ( WAVE) - A new lawsuit describes an alleged fraud scheme that's made victims of police officers.
WAVE 3 News broke the story last November, when we found the Louisville Metro Police Officers Credit Union was rocked by a fraud scandal.
The lawsuit was filed against the credit union and its former Vice President, Josephine Crowe.
In the documents, an officer describes trying to get a car loan, only to discover their credit report was a mess because of delinquent loans they knew nothing about.
The lawsuit claims in some instances, fake loans were created in credit union members' names. Other times, direct deposit payments were not being applied to their actual, real loans. Money was being diverted into another account which Crowe had access to, according to the lawsuit.
"It's sad, it's sickening and I feel terrible for everyone affected," the plaintiff's attorney, Allan Cobb, said.
The couple named as plaintiffs claim 28 fake loans were created in their names.
"I'm at a loss of words of how this could happen without one or more people knowing and working together to hide financial improprieties," Cobb said. "There's just no way."
Fraud at credit unions is not new.
In fact, according to a report by the Credit Union Times, 11 of the 15 small credit unions that closed nationally in 2015 named fraud as the reason why. The losses totaled more than $12 million.
Statistics provided by the National Credit Union Administration, a federal agency, showed that in 2017, of 10 credit union failures, fraud was a contributing factor in three. In 2016, they said, our 14 failures, fraud was a contributing factor in 10.
Crowe has now been fired. So have other credit union employees, Cobb told us. Crowe declined to comment Thursday when asked about the allegations against her.
"It's not a matter of they don't think they're going to be caught," Cobb said. "They just keep doing it, knowing how it's going to end up."
Crowe has not been criminally charged. Her past shows she has filed for bankruptcy before. She also is listed as the founder of the Meredith House -- an early childhood education center in Portland that was in the works.
The NCUA has taken the credit union's management over while the FBI investigates through a conservatorship. The NCUA wanted to make sure members knew their funds are still insured.
But, Cobb told us his clients have not been told where their direct deposit funds are, and are being denied access to their account records.
Other sources told WAVE 3 News Investigative reporter, Natalia Martinez, they are not getting any answers to their financial questions either.
The credit union is state chartered, under Kentucky's Department of Financial Institutions. The DFI told us they perform "periodic examinations of all state-chartered credit unions. Depending of the size of the credit union, examinations are conducted either annually or every 18 months."
It is so far unclear if any red flags were raised during previous examinations.